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PENNSYLVANIA
THE REGION’S AWARD-WINNING SOURCE OF BUSINESS NEWS AND INFORMATION
JANUARY 2018 VOL. 33 NO. 1
WHAT’S IN STORE FOR 2018? by Dave Gardner
Optimism with a touch of cautious sobriety mark the economic forecasts from a lineup of distinguished analysts as America marches into yet another new year. Calendar year 2017 produced fertile ground for future commerce within America’s $19 trillionplus GDP with 2.3 percent growth, according to Gus Faucher, senior economist with PNC Bank. He is therefore forecasting a measurable GDP improvement for 2018, with 2.7 percent growth and most economic sectors producing a healthy showing. He predicts that housing starts and home pricing will tick upward, and the vital price of crude oil will actually decline to around $50-plus per barrel on the world markets. Traditional retail will continue to evolve, along with the associated retail real estate interests, but old economic sectors such as the coal industry will ebb as the dynamics of new industries, such as natural gas, flex their energetic muscles. “Of course, a war in Korea could end all bets on forecasting the economy,” said Faucher. The Congressional effort toward changes in the federal taxation system according to Faucher, will also help to provide a bump upward with commerce. However, he warns that the current effort is not genuine tax reform, because it will undoubtedly increase the national debt, thereby producing only a short-term stimulus. Faucher also remarked that the Federal Reserve appears to be following a cautious, but genuine pro-growth agenda in the manner of the past decade. The year ahead for legislators will probably witness spirited debate about the
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David Taylor, president and CEO of Pennsylvania Manufacturers Association
financial implications of massive baby boomer retirements, how to pay for promised benefits, and the amount of financial support to deliver in the years ahead. Included in this Congressional discussion will be societal questions about what American society will tolerate with the number of uninsured for health care, including within retirement. “No real efforts have been made to cope with rising health care costs,” said Faucher. “Washington has conducted absolutely no conversations about this issue because we do not yet have the political will to talk about this very difficult situation.” Faucher added that there are no factual indications off-shored manufacturing jobs will return in large numbers, as promised by President Trump. The true focus within manufacturing has become
the use of machines to replace unskilled human workers, thereby making workforce development the key for employment within technology-based manufacturing. “Labor reductions from robotics will become increasingly common in the days ahead, and total manufacturing employment may actually drop,” said Faucher. “The big question is how to help those left behind by all of these market changes.” Tax reform bump Washington’s efforts at tax reform will undoubtedly fuel some growth for Pennsylvania’s $531 billion GDP, predicted Gene Barr, president and CEO of the Pennsylvania Chamber of Commerce. However, Barr warned that to a large degree anticipatory returns already have been taken out of the reform’s final effects, and he questions if the national economy will receive the mass economic bump forecasted by Washington. In addition, the resultant increase in the national debt will inevitably serve as an economic brake, with Please see What's In Store, Page 4
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Leadership Profile: Teri Ooms
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Small business Spotlight
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